Word: grummans
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Some Congressmen think so. In the Department of Transportation, the feeling is that even if the CAB authorizes a subsidy, Congress will not fund it because it is tired of being asked to bail out private companies in the manner of Perm Central, Lockheed and Grumman. Wisconsin's influential Democratic Senator William Proxmire, a longtime foe of subsidies to business, is adamant against any aid to Pan Am beyond possible increases in fares. He bristles at the thought of turning Pan Am into "the nation's largest welfare recipient...
...that some wags have wondered whether he might be willing to use some of his oil revenues to pay for the cost overruns that U.S. defense contractors often experience. Last week it appeared that he really might. The Shah's government offered a loan of undisclosed size to Grumman Corp. of Long Island to help it keep building the cost-plagued F-14A Tomcat fighter. Iran has ordered 80 of the planes, which cost $17.8 million each...
...offer came after the U.S. Senate voted down, 53 to 35, a proposal to have the Navy, which has ordered 374 Tomcats, lend Grumman $100 million. Grumman had claimed that it needed the money immediately to meet its payrolls. But Senators angrily noted that Grumman had reinvested an earlier Navy loan in high-yield, short-term securities and made a net profit of nearly $3 million. Some Senators also were annoyed that Grumman had paid dividends of 15? a share to stockholders in the last two quarters; Grumman last week postponed until next month action on another dividend, but conceded...
...Government, of course, could well refuse to let Grumman take a loan from the Shah (whose government recently bought a fourth of the shares of West Germany's giant Krupp combine at a cost of about $100 million). Democratic Representative Otis Pike and Republican Senator Jacob Javits of New York are pressing the State Department to approve. But it scarcely seems in the U.S.'s interest to let an important defense contractor become financially dependent on a foreign government. The Pentagon is urging Grumman to seek financing from U.S. banks instead. There also is a serious political question...
...merger, has consistently been one of the most profitable firms in the aerospace industry. While most competitors were just beginning to recover from a three-year-old slump, McDonnell Douglas profits last year rose 16% to $129.5 million, on sales of $3 billion. Unlike Lockheed and Grumman, the firm has avoided massive cost overruns on its Government contracts, through good luck and tight financial controls. Unlike Boeing, which has been concentrating its efforts on commercial airliners at a time when the airlines have too many seats and not enough passengers, McDonnell Douglas keeps about a fifty-fifty split between Government...